sickness and unemployment insurance (ASU) - Insurance cover arranged by the borrower to protect against inability
to meet mortgage payments.
This cover should be more accurately described as accident, sickness
and redundancy insurance as unemployment cover is generally seriously
restricted to cover only events that are entirely beyond the control
of the insured person. Typical exclusions include dismissal following
professional misconduct and any act of voluntary redundancy. The
accident and sickness cover will also be subject to major restrictions
such as any act of self-injury or any injury related to the use
of alcohol or drugs.
- a chartered or certified accountant.
- a letter of income confirmation provided by an accountant (normally
chartered or certified).
Some lenders may accept an accountant's letter in lieu of audited
accounts. Such confirmation is more likely to be accepted if the
loan-to-value ratio is below a certain level and it is normally
used only for the self employed or controlling directors.
added to loan
- a reference to the additional costs associated with arranging
a mortgage such as Higher Lending Charge or
arrangement fees, which can be incorporated into the amount you
Fees that may be added vary by lender. Care should be exercised
when the sum of the loan and any costs added to the loan may cause
the total advance to exceed a given loan-to-value . In certain cases
additional conditions may apply.
- When lending exceeds a certain loan-to-value lenders may require
The simplest form of additional security is a Higher Lending Charge.
Alternatively lenders may accept other security such as cash or
shares being deposited with them or a charge over another property.
- see also valuation fee. Some lenders will reserve a proportion
of the fee charged for the valuation to cover their own costs. This
element of the valuation fee may not be refunded should an application
not proceed even if the valuation has not taken place.
- restriction placed on certain rural properties which requires
that the land adjoining a residence be actively used for farming.
annual percentage rate (APR)
- a definition intended to identify the true cost of borrowing and
to provide the consumer with a method of comparing the true costs
of different types of loan.
Mortgage loans were originally excluded from a requirement to quote
an APR and was designed more to reflect the cost of different types
of hire-purchase contracts which, at the time the legislation was
drafted, were frequently quoted on flat and fixed basis giving headline
rates which were often half the APR. It is a legal requirement that
a true APR figure be provided with any loan illustration.